Namibia’s government has dismissed Shell’s assertion that its discoveries in the Orange Basin are uneconomic to develop, stating it remains committed to exploiting these resources with “the right partner.”
This response follows Shell’s announcement earlier this week that its five discoveries in Petroleum Exploration Licence (PEL) 39 are not currently commercial, leading to a $400 million write-down on the cost of exploration wells drilled in the block.
Namibia’s Energy Minister, Tom Alweendo, described Shell’s decision as “unfortunate” and reaffirmed the government’s belief in the potential of the resources. The state oil company, Namcor, also emphasized that the partnership is planning additional exploration and appraisal work within the licence.
Shell attributed its decision to sub-surface challenges, citing issues with porosity, permeability, and high gas content as factors making the discoveries commercially unviable.
Namibia, however, remains optimistic and has signaled its readiness to pursue development opportunities with a partner capable of addressing these technical challenges.
